Monday, June 17, 2013 | 2:28 p.m.
LOS ANGELES — The former head of a Nevada company that sold nutritional supplements has been convicted of securities fraud.
The U.S. Attorney's Office in Los Angeles said Monday a jury returned the verdict last week after a three-day trial.
Prosecutors said 57-year-old Richard A. Bailey violated securities law in 2004. Bailey was the chief executive of Gateway Distributors Ltd.
Bailey was accused of paying over $1 million worth of company stock to a businessman for consulting work that was never performed. The businessman later liquidated the shares and wired a substantial sum to escrow accounts owned by Gateway, which was looking to buy a Utah resort and a Las Vegas office building.
Prosecutors say the stock payments were a sham and were intended to raise capital for the company.